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Monday’s bond market has opened down slightly due mostly to a strong start for stocks. The stock markets are kicking the week off with sizable gains, pushing the Dow up 140 points and the Nasdaq up 39 points. The bond market is currently down 3/32, but we may still see a slight improvement in this morning’s mortgage rates because of strength in bonds late Friday.
There is no relevant economic data being posted today, so the flat open in bonds comes as no surprise. Look for stocks to be the cause of an intra-day revision to mortgage rates. If the major stock indexes remain near current levels, we should see bond prices and mortgage rates follow suit. On the other hand, a noticeable move upward could pressure bonds and lead to an afternoon increase in rates. If stocks go into selling mode, bonds and mortgage rates are more likely to improve later today.
The rest of the week brings us the release of five economic reports to be concerned with in addition to testimony from Fed Chairman Yellen and two potentially relevant Treasury auctions. None of the reports can be considered key or highly important to the markets, but a couple of them certainly carry enough significance to affect mortgage pricing. We will probably see the market get more active as the week progresses.
The first of this week’s data is February’s Consumer Confidence Index (CCI) at 10:00 AM ET tomorrow morning. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. If consumers are feeling good about their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show little change in confidence from the 80.7 reading in January to 80.8 this month. A lower reading would be considered good news for bonds and mortgage rates since it would indicate consumers are less likely to make a large purchase in the near future.
Overall, Thursday is the best candidate for most active day of the week in terms of mortgage rate movement with the Durable Goods report, Chairman Yellen’s congressional appearance and a Treasury auction taking place. I suspect it will be a fairly active week for mortgage rates with something relevant scheduled for each day except today. However, I am not expecting a significantly volatile week unless something unexpected happens.